The Centers for Medicare & Medicaid Services (CMS) recently released its third annual evaluation of the State Innovation Model (SIM) Round One Test States, which analyzes the ability of states to use policy and regulatory levers to drive statewide health care transformation. The evaluation, completed by a team of researchers from RTI International, the Urban Institute, and the National Academy for State Health Policy, arrives at a pivotal time. Many states are eager for information about their peers’ experiences transforming delivery systems to reward value over volume and be more consumer-centered.
- Expanding value-based payments: In Year 3, SIM Round One Test States successfully expanded value-based payments through reforms such as accountable care organizations (ACOs), behavioral health homes, and patient-centered medical homes (PCMHs). Despite efforts to expand value-based payment models to private insurers, these reforms have, for the most part, been focused on Medicaid rather than multi-payer reforms.
- Engaging commercial payers: Where multi-payer participation has been achieved (Arkansas and Vermont), regulatory and purchasing power (i.e. contract requirements) were effective levers. For example, in Arkansas, insurance regulations require all Qualified Health Plans certified to sell through the health insurance Marketplace to enroll their members in PCMHs and to make per member per month payments to PCMHs. Legislation was another important lever enabling multi-payer reforms by creating conditions under which commercial payers may be more likely to adopt value-based payment models. For example, Vermont’s Green Mountain Care Board used legislative authority to set standards for ACOs. Relying on the voluntary participation of commercial payers has had less success in expanding value-based payment from Medicaid to commercial payers.
- Engaging providers: Multiple states have designed their payment reforms to allow for provider choice and flexibility in order to encourage participation. Maine, Minnesota, and Vermont allow providers to select the type of risk and/or the timing of the risk they take on when joining ACOs. This means a choice between one- or two-sided risk. One-sided risk is the opportunity to share in the reward of savings and two-sided risk includes both options of reward and the potential for financial penalties. States are also attempting to be responsive to providers’ feedback to their models. In Maine, for example, behavioral health home provider reimbursement rates were increased in response to provider concerns, and in Minnesota the model for attributing Medicaid beneficiaries to ACOs was changed to improve the model’s accuracy. Finally, in their third year, two SIM Round One Test took steps to convene and engage medical and nonmedical service providers, for example, through regional collaboratives in Vermont and through Accountable Communities for Health in Minnesota.
- Building data analytic capacity and infrastructure: One notable area of focus for SIM Round One Test States is the development of in-state capacity for the data analytics and exchange necessary to drive and support value-based payment reform. These efforts are often foundational in order to enable payment reforms to succeed. This work includes a range of activity including generating reports on cost and quality measures, working with providers to interpret and act upon reports, connecting providers to health information exchanges, and developing notification systems to alert providers about their patients’ use of emergency rooms.
While 2016 was too early to assess the impact of SIM Round One on expenditures and utilization of services in test states, taken as a whole, these efforts are part of a national movement toward value-based payments and shed light on how states can effectively achieve these reforms. For more detailed information, read the complete third annual valuation.
Responding to rapidly rising drug costs, 30 states across the country have drafted more than 60 drug price transparency bills designed to:
- Identify the costs that contribute to drug manufacturer expenses and list prices
- And unveil the often opaque business practices of pharmacy benefit managers (PBMs).
In addition to promoting pricing transparency, as of early August state legislators had also introduced more than 100 bills addressing different aspects of rising drug costs.
States are large purchasers of prescription drugs for a number of programs and agencies, such as Medicaid, prisons, and state employee benefits. Escalating drug prices have put pressure on states to create legislation to improve the sustainability of their budgets and ensure health care access for their residents.
Some of the more ambitious proposed legislation requires manufacturers to justify prices, particularly for new drugs or for large year-after-year increases for older drugs that strain state budgets. Other states plan to use their authority to take action under long-standing “unfair business practices” laws. By increasing the transparency of prescription drug prices, lawmakers hope to be better equipped to manage costs and lower the burden on taxpayers and health care consumers. Here are brief highlights of state transparency proposals.
Vermont: Policy Innovation with Transparency
Last year, Vermont passed Act 165, the nation’s first drug price transparency law, which has spawned similar legislation across the country. Act 165 requires the Green Mountain Care Board to identify “drugs on which the state spends significant health care dollars and for which the wholesale acquisition price has increased by 50 percent or more over the past five years or by 15 percent or more over the past 12 months.”
The board reports to the state’s Attorney General (AG), who may require manufacturers to submit information and documentation justifying the price. In assessing the impact of the legislation, observers have noted that the law addresses only Medicaid expenditures and does not affect other large purchasers. Also, manufacturer data the law required was not highly detailed, which has made it difficult to gauge if the prices and increases are justified or not.
Nevada: Increased Transparency for Nonprofits and Pharmacy Benefit Managers (PBMs)
Nevada’s Governor recently signed into law Chapter 592, which requires price transparency by manufacturers and revenue transparency from nonprofit patient advocacy organizations. It also sets new standards for PBM business practices. Patient advocacy organizations are now required to report contributions and benefits received from drug manufacturers, insurers and PBMs, or the trade and advocacy groups for such entities. Nevada-based PBMs now have a fiduciary responsibility to their contracted insurers and must disclose all rebates they receive from manufacturers. PBMs are also prohibited from certain anti-competitive business practices, such as gag clauses, that prevent pharmacists from discussing drug prices with their patients.
Maryland: Protecting Consumers from Price Gouging
Earlier this year, Maryland passed HB 631, which seeks to protect payers from “unconscionable” drug prices. The law applies only to off-patent and generic drugs, and it authorizes the state’s AG to take legal action if the AG’s office deems a drug price unconscionable. The courts may impose penalties on the manufacturer if it finds the manufacturer has violated the law.
Slated to take effect Oct. 1, 2017, the bill caused the generic drug trade association to sue in an effort to block the bill. While states await the court’s decision, other states such as New York have already introduced similar legislation.
California: Price Transparency for Manufacturers and Cost Transparency for Payers
California’s transparency proposal, SB 17, requires a 60-day notification of price increases over a specified pricing threshold and mandates that health plans report the percentage of premiums spent on prescription drugs. The bill is being closely watched because it is facing fierce industry opposition but has continued to move forward. Update: On Sept. 11, 2017, the California General Assembly overwhelmingly approved SB and it is expected to be signed into law.
Pennsylvania: Transparency and Alternative Payment Models
Some states have proposed legislation to use information obtained from transparency directives to formulate alternative payment models for prescription drugs. Pennsylvania’s HB 1464 proposes to document a wide array of cost-contributing factors that affect a drug’s wholesale acquisition cost. The bill also studies additional costs incurred from expensive medical interventions or hospitalizations that result because of patients’ inability to afford and maintain access to prescription drugs.
While transparency will not bring all the change that is needed, many agree it provides a necessary foundation on which to build future legislation that will have greater impact on controlling drug costs.
Another Model to Lower Costs: Determining “Excessive Costs” and Working with Payers
Four states recently proposed legislation (MA SB 652, NJ S 3088, NY A 5733, OR HB 2387) that attempted to determine when drug prices create “excessive costs.” The bills generally establish a dedicated commission or board with the authority to work on behalf of a state’s best interest in evaluating and making recommendations about prescription drug prices based on data reported by drug manufacturers.
Oregon HB 2387, which attempted to protect both consumers and payors (who provide the insurance coverage), failed to pass, but it included some novel provisions. The bill proposed a cap on patient costs, which required private or public plans to pay the remainder. To offset this cost, the manufacturer would reimburse those purchasers when costs exceeded specified price thresholds. With a cap on patient costs and only limited reimbursement from manufacturers for any “excess” plan costs resulting from the cap, opponents of the bill were concerned that it would lead to cost shifting onto public and private plans, ultimately increasing the out-of-pocket costs for some consumers. NASHP recognizes these challenges and has developed a Rate Setting Model legislation to address these and other legal and regulatory concerns.
Working to Coordinate and Maximize State Efforts
How effective these early bills will be remains to be seen, but one fact is certain—state legislatures want solutions to the high costs imposed by current drug prices. NASHP’s Center for State Rx Drug Pricing will continue to track states’ legislative efforts and its Rx Cost Workgroup will produce more state resources. For more information read: States and the Rising Cost of Pharmaceuticals: A Call to Action.
On Monday, July 10th, the Centers for Medicare and Medicaid Services (CMS) released a tally of issuer submissions to offer individual market coverage through the Federally-facilitated Exchange. The National Academy for State Health Policy (NASHP) conducted an analysis of preliminary rate filings for states that have opted to run a State-based Exchange (SBE), finding that issuer participation is anticipated to remain steady in the SBE states. NASHP will track and updates submission as they become finalized early in the fall.
“SBE officials remain hard at work in partnership with their state insurance departments and issuers to maintain consumer choice for exchange enrollees, said NASHP Executive Director, Trish Riley. “These states are working to preserve affordable options amid uncertainty over national policies of consequence to insurance markets including funding for cost-sharing reduction (CSR) payments and further regulatory and legislative reforms made to the Affordable Care Act.”
Wednesday, October 25th
Under a new Administration, there has been increased focus on the need for more flexible federal funding for state health programs. This session examines the implications of braiding, blending, or block granting traditional Medicaid and public health funding streams to support population health goals. Speakers share their own states’ braiding and blending experiences, and discuss innovations and strategies to capitalize on a federal drive toward increased cross-program integration and flexibility. Examples include Louisiana’s Permanent Supportive Housing initiative, South Carolina’s Nurse-Family Partnership Pay for Success initiative, and Vermont’s Supports and Services at Home. This session is presented in partnership with the de Beaumont Foundation.
- Bryan Amick, Acting Deputy Director for Health Programs, South Carolina Department of Health and Human Services
- Ana Novais, Executive Director of Health, Rhode Island Department of Health
- Jenney Samuelson, Associate Director, Vermont Blueprint for Health
- Robin Wagner, Deputy Assistant Secretary, Office of Aging and Adult Services, Louisiana Department of Health
Presented in partnership with the de Beaumont Foundation
Related NASHP Resources:
- Webinar: Braiding and Blending Funds to Meet Health-Related Social Needs: Lessons from Louisiana and Virginia
- Publication: Braiding Funds to House Complex Medicaid Beneficiaries: Key Policy Lessons from Louisiana
- Publication and Infographic: Pooling and Braiding Funds for Health-Related Social Needs: Lessons from Virginia’s Children’s Services Act
- Publication and Infographic: Braiding and Blending Funding Streams to Meet the Health-Related Social Needs of Low-Income Persons: Considerations for State Health Policymakers
Post-election, federal leaders are debating changes to the ACA (Affordable Care Act) and whether it will continue in light of the goals put forth by the incoming Administration. Meanwhile, open enrollment for the health insurance marketplaces is in full swing, with some states reporting increased or record enrollment figures during these first weeks of enrollment (CO, MN, federally-facilitated marketplace states).
Leading up to this enrollment period–and drawing on lessons from previous years–states were hard at work developing new strategies and system improvements to ensure the ability of their marketplaces to provide access to affordable, competitive coverage options to the communities they serve.
The more you know- using state resources to gather information
Data sources such as U.S. Census surveys and reports issued by the Office of the Assistant Secretary of Health and Human Services have provided valuable information for states hoping to better understand their uninsured and marketplace populations. However, beyond national data sources, several marketplaces have tapped into information collected by other agencies to help map out the uninsured in their state. For example, Oregon’s Health Insurance Marketplace uses a biannual survey issued by the Office of Health Analytics, to understand detailed information about health insurance coverage and impacts of the ACA on access and utilization. Vermont’s Household Health Insurance Survey collects information on uninsured residents as well as details about insured residents and their coverage options.
MNsure, Minnesota’s SBM leverages the state Department of Health’s Health Access Survey to learn more about the uninsured in Minnesota, as well as to measure the impact of MNsure on that group. The large-scale telephone survey, conducted in partnership with the University of Minnesota, collects information about health insurance and health care access. In addition to providing information on demographic shifts in the non-group market, the survey allowed for the collection of information on uninsured residents’ awareness of MNsure, and their reasons for not pursuing coverage. Results from 2015 found that while many Minnesotans were aware of MNsure, many did not know about premium subsidies or realize that they would be eligible for them.
Refined marketing and outreach strategies to target the remaining uninsured
Nationally, the uninsured rate was 9 percent in 2015 and of the 15 SBMs, all but three are at or below this national rate. To best target pockets of the remaining uninsured, states are launching new outreach and marketing strategies and are refining successful strategies from previous years in efforts to attract populations that remain elusive.
In Massachusetts, where 96.4 percent of residents are insured, the marketplace, known as the Massachusetts Health Connector (Connector), has identified three key populations where it will “focus and deepen” its outreach and marketing efforts–Latinos, workers at risk of losing employer coverage, and new state residents. As reported by the Connector, these populations have a greater risk of being uninsured or experiencing gaps in coverage. Through research conducted through state and local data sources, and in tandem with engagement of community partners, the Connector has honed in on campaign methods that best resonate with these populations. For example, the Connector learned that for those in volatile industries who may be at risk of losing employment and health coverage or with uncertain employment, cost is a huge perceived barrier in gaining insurance. This is particularly so for those who may have variable income for a time and are uncertain how to report it. Outreach to this population recognizes the high stress of economic uncertainty and educational materials explain how to make reporting that income easier. In Massachusetts, Latino individuals are significantly more likely to be uninsured than any other ethnic group. For OE4 the Connector has partnered with the Latino Chamber of Commerce and other civic organizations to increase awareness and create clearer messaging from within the community. Outreach targeting new residents focuses on awareness of special enrollment periods—the designated time many individuals who move may qualify for enrollment.
Last year, Covered California found great success with their “hotspot” maps of subsidy eligible populations these will be continued this year. To inform its OE4 outreach plans, Covered California conducted qualitative and quantitative research with uninsured residents including evaluation of over 31 focus groups in five languages. In total, 3,427 insured and uninsured people were surveyed across multi-segment, African American, Asian, Hispanic, and LGBTQ communities. Covered California found that across all segments, the remaining uninsured have adopted “coping strategies” to deal with their lack of coverage, including relying on the emergency room for care to avoid a doctor’s appointment. This makes it harder to convince the long-term uninsured population to buy coverage. In addition, Covered California found that consumers want specifics of what is offered through the marketplace, but simultaneously are overwhelmed by the insurance selection process. In response, Covered California adjusted its advertisements by adding carrier brand names and logos to ads, appeasing the need for more specificity. It has also strengthened efforts to show empathy for consumers seeking in-person assistance, stressing the availability of free expert help. Covered California also tested several marketing strategies and found that their “It’s Life Care” campaign, which “emotionally conveys the value of coverage” tested well with all groups, with slight variations and areas of nuance in certain segments.
Colorado’s marketplace, Connect for Health Colorado (C4HCO), worked with community-based organizations to collect data about high-uninsured areas. C4HCO required community organizations seeking to join Colorado’s assistance network to include their targeted zip codes and outreach work plans as part of their applications to become assisters. It has partnered with Enroll America to cross-reference those zip codes with data collected by the Colorado Health Institute about the location of the state’s uninsured. Enroll America was then able to create individualized maps of targeted zip codes to deliver to assister organizations. The data also informs a highly targeted digital marketing campaign. C4HCO has partnered with the Colorado’s Medicaid agency to capture contact information on consumers who are denied Medicaid eligibility and have not enrolled in a marketplace plan. Those residents — many thousands believed to be subsidy Eligible But Not Enrolled (EBNE) — will be contacted by email and by phone in a multi-pronged outreach campaign during OE4.
The lessons of the marketplaces, and the steps they have taken to respond to the needs of the constituencies of their states, will serve as important resources to inform future debate about the delivery of coverage across states. No matter what the congressional outcome is on the ACA, the fact remains that millions of Americans are getting their health insurance through the state exchanges and many more are continuing to sign up. This open enrollment period ends in January, and NASHP will continue to provide updates on the efforts of the marketplaces throughout. Future blogs in this series will examine the other ways that SBMs have improved their systems in preparation for open enrollment, from new consumer tools to new technologies, to innovative outreach strategies and community partnerships. Have questions or information to share about the marketplaces? We invite you to join one of our discussions to continue the conversation and think about how this work could inform the national policy debate
States are testing a myriad of models that strive to achieve the Triple Aim objectives of improved care, reduced health care costs, and better health. Though several statewide health care delivery and payment system reforms have been shown to help slow the growth of health care expenditures and improve methods for delivering health care, taken alone they are not enough to fully attain the Triple Aim goals. In an effort to improve the overall health of populations while further reducing healthcare costs, many state and federal health policymakers are partnering with communities to implement population health initiatives that engage new community partners to address the social factors influencing health such as housing, food, work, and community life. Among the models for implementing community-based interventions, Accountable Communities for Health (ACHs) are surfacing as a promising state strategy to integrate and align state health care delivery system transformation with community-based social services to create communities that promote health and well-being.
This brief and the accompanying state profiles identify state levers that advance ACHs by examining the ACH programs in California, Minnesota, Vermont, and Washington State. Specifically, this brief weighs the roles states and communities have played in establishing core ACH components including governance structures, geographic boundaries, financing mechanisms, priority conditions and target populations. It also considers state-level resources that can be leveraged to support and sustain ACH models going forward.
California State Profile
Minnesota State Profile
Vermont State Profile
Washington State Profile
On May 10, 2016, Connecticut Governor Dannel Malloy signed legislation limiting most first-time opioid prescriptions to seven days (Pub. Act 16-43). The Vermont General Assembly passed a similar bill earlier this month, which will require the state’s Health Commissioner to adopt rules governing opioid prescribing. (Note: The Vermont law was passed during the final week of the legislative session; as of Wednesday May 18th, 2016, the bill has yet to reach Gov. Shumlin for his signature.) Additionally the U.S. Congress has also passed legislation that will create new grant opportunities for states to address opioid abuse.
With more flexibility for prescribers, than the laws passed recently in Massachusetts and Maine, Connecticut’s legislation affords exceptions for palliative care and cancer pain, and allows providers to prescribe in excess of the cap for acute pain based on professional judgment. Furthermore, Connecticut did not restrict the supply of opioids that could be prescribed for chronic pain.
The law builds on 2015 legislation (Pub. Act 15-198) that set requirements for using the state’s prescription drug monitoring program, authorized pharmacists to prescribe naloxone, and required health care providers to complete continuing education courses in pain management and prescribing controlled substances. New provisions include:
- Prescription Drug Monitoring Program: Prescribers can now authorize individuals other than licensed health care professionals to use the prescription drug monitoring program on their behalf.
- Administering Naloxone: The new law includes immunity provisions for any licensed health care provider administering naloxone to treat or prevent a drug overdose; previously, only health care professionals authorized to prescribe naloxone had such immunity. The law also requires each municipality in the state to ensure that emergency responders are equipped with naloxone and prohibits insurers from requiring prior authorization for opioid antagonists.
- Acupuncture: The law expands the settings in which certified individuals may practice auricular acupuncture to treat alcohol and drug abuse.
The law does not codify specific limitations on opioid prescriptions. However, the legislation does note that new regulations may include evidence-based limitations on the number of pills that can be prescribed, including a maximum number of pills prescribed following minor medical procedures. A new 35-member Controlled Substances and Pain Management Advisory Council—which replaces the state’s 29-member Unified Pain Management System Advisory Council—will consult with the state’s Health Commissioner in adopting the rules.
The bill includes a number of notable provisions that go beyond limiting access to opioids. Specifically:
- Naloxone Rescue Kits: The bill appropriates $182,000 for the purchase and distribution of naloxone rescue kits; $32,000 is earmarked for purchase and distribution to emergency medical service personnel.
- Prescription Drug Monitoring Program Requirements: Pharmacies and other dispensers must report dispensing any Schedule II-IV controlled substances within one business day. The law authorizes—but does not require—the Health Commissioner to require prescribers to query the system before writing an opioid prescription through rulemaking.
- Provider Training: The Health Commissioner must convene medical educators and other stakeholders to develop curriculum changes to ensure students and residents are trained in prescription drug abuse prevention.
- Continuing Education: Physicians, advance practice nurses, pharmacists, dentists, and optometrists who prescribe or dispense controlled substances must complete at least 2 hours of relevant continuing education each licensing period.
- Medicaid Acupuncture Pilot: The Department of Vermont Health Access must develop a pilot project offering acupuncture services to Medicaid-eligible residents with chronic pain.
- Telemedicine: Payers must reimburse both the local and remote facilities when substance use disorder treatment services are delivered using telemedicine, unless the providers at each site are employed by the same entity.
- Prescription Drug Disposal: The Department of Health must establish and maintain a program to provide the safe disposal of residents’ unused and unwanted prescription drugs.
- Pharmaceutical Manufacturer Fee: Vermont currently requires pharmaceutical manufacturers and labelers to pay a fee on the prescription drugs paid for by the Department of Vermont Health Access (including Medicaid and CHIP). This bill increases the fee from 0.5 percent of the previous year’s drug spending to 1.5 percent. A portion of the increased revenues will fund many of the provisions introduced in this law, including the drug disposal, Medicaid acupuncture pilot, and naloxone distribution programs.
Comprehensive Addiction and Recovery Act of 2016
On May 13, 2016, the U.S. House of Representatives passed an amended version of The Comprehensive Addiction and Recovery Act of 2016 (S. 524). The bi-partisan legislation, which passed the Senate in March, now moves to a conference committee to reconcile differences between the engrossed bills. The language passed by the Senate and House both address opioid addiction on several levels: through prevention measures, by expanding access to emergency intervention resources such as naloxone, and by shifting approaches to opioid addiction away from incarceration and towards treatment. Currently, specific provisions include:
- Expanding access to naloxone via co-prescribing by pharmacists (with opioids) and providing training and resources for first responders, such as law enforcement and emergency medical services.
- Establishing grant programs to increase prescribing of overdose reversal drugs, including three-year grants of up to $500,000 to support states in developing best practices, training materials for prescribers and dispensers, and public education materials. A second grant program would provide up to $200,000 of funding per grant year to qualified entities (such as federally qualified health centers, opioid treatment programs, and certain practitioners dispensing narcotic drugs) to increase access to naloxone.
- Studying the effects of Good Samaritan Laws in states that provide immunity for individuals who seek emergency care for themselves or a loved one experiencing an overdose
- Grants to establish or expand supportive programs for veterans, such as veteran treatment courts programs, peer-to-peer services, practices providing treatment and transitional services to veterans who have been incarcerated, and training programs to teach criminal justice, mental health, and substance abuse personnel how to identify and appropriately respond to incidents involving qualified veterans.
- Targeted support to improve state prescription drug monitoring programs, supporting plans to “apply the latest advances in health information technology in order to incorporate prescription drug monitoring program data directly into the workflow of prescribers and dispensers to ensure timely access to patients’ controlled prescription drug history.”
Engaged in multi-payer payment reforms? Seeking information about the cost of care? About the rate of opioid prescribing? Assessing carriers to generate needed revenue to support state activities like vaccines for children? You might soon hit a federal stoplight. The Supreme Court’s recent decision in Gobeille v Liberty Mutual, which denied the state’s ability to mandate claims submission from self-funded ERISA health plans, may have started us down a slippery slope that could limit states’ broader health reform activities of states. It’s not just about data collection anymore.
Will Gobeille open the door for ERISA reinterpretation and narrow state options?
In Self-Insurance Institute of America Inc. v Snyder et al., the 6th Circuit ruled that a Michigan tax on all health plans was not in conflict with ERISA. The case was appealed to the Supreme Court and was recently remanded back to the 6th Circuit, asking that court to reconsider it’s ruling in light of Gobeille. This signals a new day in ERISA – and a potential reconsideration of the longstanding interpretation of ERISA established in New York State Conference of Blue Cross & Blue Shield Plans v Travelers Ins. Co. 514 U.S. 645 (1995). That decision allowed the state’s hospital rate setting law to continue despite imposing some additional costs on ERISA plans. There the Court allowed a state’s action because that action did not affect the plan’s benefit design or restrict the plan from designing a uniform benefit. The Travelers decision has long informed court decisions and allowed states some discretion so long as their actions do not impose burdens on the administration, uniformity, and benefit design of ERISA plans. At issue in Snyder is whether Travelers will continue to inform the Court’s decisions or whether applying Gobeille will narrow its broader interpretation.
The Michigan Health Insurance Claims Act was enacted to replace a six percent tax on managed care plans with a one percent across-the-board tax on all health carriers and third party administrators. It raises up to $400 million annually for the Michigan Medicaid program. If the 6th Circuit, in its next, post-Gobeille review, concludes that the tax is pre-empted under ERISA, Michigan stands to lose a significant funding source. Other states currently generate funding through assessments on health plans to support the operation of state based exchanges, All-Payer Claims Databases(APCD), and vaccine for children programs. (See Table) While each of these assessments has different origins and purposes, should there be a ruling that Michigan’s assessment violates ERISA, there could be significant impact on revenue generating strategies in states.
If a decision in Synder results in revisiting and overruling Travelers, this could open the door to further challenges to state initiatives particularly around all payer payment reforms and other cost containment strategies. Historically states have faced ERISA challenges in managed care regulation, provider payment mandates, and any willing provider laws. States engaged in reforms should keep a watchful eye on the 6th circuit and craft policy proposals with careful consideration of ERISA implications. And since it will be the Gobeille decision that could trigger new Court rulings that more broadly affect states, what happens next in state APCD policy bears scrutiny.
What happens to APCDs and Transparency Post-Gobeille?
States need claims data as they advance payment and delivery reforms, and work to compare costs of care across payers and over time as reforms unfold. APCDs fill a critical need for accurate data about the cost of care. While claims data are available through a variety of health plan voluntary efforts and regional collaboratives, APCDs are unique in their transparency and accountability as publicly created entities that collect data from all payers, as well as validate and report it. They are able to provide detailed analysis at the payer and provider level. This single, credible, and accountable source of data about health care costs and utilization can provide public access to information that informs health policy, health care purchasing, and consumer choice. And it assures policymakers a single source of credible data, instead of the “dueling data” sources that confound, rather than enlighten policy deliberations.
The future of APCDs, and the public accountability they provide, has come into question since the Gobeille decision that struck down the capacity of APCDs to require claims reporting by self-funded ERISA plans. Can APCDs be effective without all claims, particularly since self- funded plans cover the majority of employees who have employer-sponsored insurance? Can APCDs secure voluntary reporting from self-funded plans given the value they provide to employers? If so, is a voluntary system adequate to assure comprehensive data? Given ERISA’s “savings clause”, can APCD laws writ large be saved from the reach of the Gobeille decision? And can ERISA plans that are purchased as fully insured products regulated by states continue to be mandated to report? Can third party administrators be licensed by the state? With questions rising to the surface, APCDs report that some carriers are suspending claims submissions while these issues are addressed.
APCDs are works in progress. More needs to be done to standardize reporting requirements and improve timeliness. This work is underway among the state APCDs. Importantly, more states have expressed interest in developing APCDs but are trying to understand the post-Gobeille pathway that allows states to continue to collect all payer claims.
In the Gobeille decision, the Court suggested one possible remedy to assure the continued public reporting of health claims data. In the majority opinion, Justice Kennedy wrote that it is the Secretary of Labor, not the states, who is authorized to administer reporting requirements by plans governed by ERISA. He suggested, but did not conclude, that the Department of Labor could support reporting requirements like that in Vermont. In concurrence, Justice Breyer went further suggesting that the Department could either establish a federal reporting system which states could access, or establish federal standards for reporting and certify states for compliance.
In collaboration with the APCD Council, NASHP has convened a Post-Gobeille Work Group of state officials and legal experts, and reached out to the Department of Labor to explore options available to them to help address the reporting challenges. We will continue our work and report here on our progress. Stay tuned.
States with Assessments on Self-Funded Plans and/or Third Party Administrators (Download Table)
In a 6-2 decision in Gobeille v. Liberty Mutual released on March 1, the U.S. Supreme Court has dealt a blow to state all- payer claims databases. By upholding a lower court’s decision, the Court ruled that states may no longer require self funded plans to submit claims data – that action is preempted by ERISA.
NASHP Executive Director Trish Riley published a blog outlining what the decision means for states.
What was at issue?
At issue was whether or not a state can compel a self-insured employer to submit health care claims – data that shows how much was paid for health care services – to the state’s APCD.
Is Vermont the only state with APCD?
Currently 18 states have enacted laws to create APCD and 20 more are considering doing so.
What does this mean for states?
This case could have a chilling effect on APCD and the critical analysis regarding the costs and quality that they enable- if the court rules that self-insured employers need not provide data to those programs.
A decision against Vermont’s APCD will likely weaken an important and still evolving tool states have to guide their reforms – independent, complete claims data that includes all payers, whether regulated by the state or the federal government.
- Update: Sixth Circuit Declines to Expand ERISA; State Assessments on Self Funded Insurers Upheld
- Gobeille v. Liberty Mutual Update: Developments We are Watching
- Blog: Are States Losing Key Tools for Health Reform?
- Chart: Overview of State Programs that Utilize an Assessment of Self-Funded ERISA Plans
- Blog: All Eyes on Michigan: Will Assessments on All Health Plans Survive
- Blog: Gobeille v. Liberty Mutual: Decision
- Chart: All Amicus Briefs Filed in Gobeille v. Liberty Mutual
- What’s at Stake for States? The Lines are Drawn in Gobeille v. Liberty Mutual
- Vermont Gets its Day in Court on ERISA: Supreme Court Agrees to Hear Gobeille v. Liberty Mutual Next Term
- Are We There Yet? An Update on Gobeille v. Liberty Mutual
- Don’t Take Your Eyes Off Vermont: Gobeille v. Liberty Mutual Insurance Company